A seller creates one new note covering the unpaid balance of the existing loan plus additional seller financing for the buyer. In states that secure loans with deeds of trust rather than mortgages, what is this wrap instrument called?
Correct Answer
D) All-inclusive trust deed
Where the security instrument is a deed of trust, a wrap is written as an all-inclusive trust deed. Other choices: wraparound mortgage describes the same arrangement, and is the right name in states that secure loans with mortgages — which is why the question asks which states; purchase-money mortgage is any note the seller takes back for part of the price, wrapping or not; and seller financing names the category rather than the instrument.
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Related Topics & Key Terms
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